Hp Inc. · NYSE:HPQ
Hp — Q1 FY21 Earnings Presentation
32 slides from Hp's earnings presentation, Feb 25, 2021
Slide 1: Q1 FY21 Earnings announcement
HP INC. Q1 FY21 Earnings announcement February 25, 2021 http://investor.hp.com
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP Inc. and its consolidated subsidia
Slide 3: Use of non-GAAP financial information
Use of non-GAAP financial information HP has included non-GAAP financial measures in this presentation to supplement HP’s consolidated financial statements presented on a GAAP basis. Definitions of these non-GAAP financial measures and reconciliations of these non-GAAP financial measures to the most
Slide 4: Q1 FY21 highlights
Q1 FY21 highlights • Net revenue of $15.6 billion, up 7.0% from the prior-year period and up 6.6% in constant currency1 • Non-GAAP diluted net earnings per share2 of $0.92, above the previously provided outlook of $0.64 to $0.70 per share • GAAP diluted net earnings per share of $0.83, above the pre
Slide 5: Q1 FY21 results overview
Q1 FY21 results overview Growth CC 1 Non-GAAP OP Non-GAAP OP Non-GAAP OP Non-GAAP OP $ in millions Net revenue Growth y/y% y/y% $3 % of rev 3 $ y/y 3 % of rev y/y 3 Printing $5,044 6.8% 7.1% $998 19.8% $244 3.8 pts Personal Systems $10,603 7.2% 6.4% $758 7.1% $96 0.4 pts Corporate Investments / $(1)
Slide 6: Q1 FY21 mix by segment and region
Q1 FY21 mix by segment and region Net revenue Non-GAAP operating profit 2 By key segment and business unit1 By key segment3 Net revenue by region Workstations and Other Personal Systems Printing – $ 1.8 billion Supplies 6% 20% Desktops 15% 19.8% $15.6 Printing – 4 Printing Commercial 6% 57% of total
Slide 7: Revenue and non-GAAP diluted net EPS performance
1 Revenue and non-GAAP diluted net EPS performance 1 Revenue (Billions) Non-GAAP diluted net EPS $16 $1.00 $0.92 $14 $0.80 $12 $0.65 $0.62 $0.60 $10 $0.58 $0.60 $0.52 $0.53 $0.51 $0.49 $8 $0.40 $6 $4 $0.20 $2 $14.7 $14.0 $14.6 $15.4 $14.6 $12.5 $14.3 $15.3 $15.6 $0 $0.00 1Q19 2Q19 3Q19 4Q19 1Q20 2Q2
Slide 8: Revenue growth
Revenue growth y/y growth (%) 10% 7.0% 6.6% 5% 2.3% 2.1% 2.0% 1.8% 0.5% 0.1% (0.2%) 0% 1.3% 0.2% 0.1% 0.3% (0.6%) (1.0%) (2.1%) (5%) (10.1%) (10%) (11.2%) (15%) 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 Revenue growth in constant currency 1 Revenue growth as reported 1. Adjusted to exclude the ef
Slide 9: Regional revenue trends
Regional revenue trends y/y revenue growth % y/y revenue growth in constant currency %1 $7 20% $7 20% Americas (including U.S.) 15% 15% United 10% States $6 $6 10% 5% 5% 0% $5 $5 0% (5%) (10%) (5%) $4 (15%) $4 (10%) billions 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 % growth billions 1Q19 2Q19 3Q
Slide 10: Personal Systems
Personal Systems Q1 FY21 • PC is essential – work from home and distance learning continued to drive strong demand in notebooks Revenue Operating profit • Strong revenue growth in high value categories like consumer $10.6 billion 1 $758 million Key premium up 34%, gaming up 29% and consumer peripher
Slide 11: Printing
Printing Q1 FY21 Revenue Operating profit • Strong momentum continues in Consumer benefitting from learning and working from home $5.0 billion 1 $998 million Key messages • Double-digit growth in Instant Ink subscriptions, surpassing 9 million subscribers 7% y/y 7% CC • Innovation: Rolled out HP
Slide 12: Non-GAAP financial information
Non-GAAP financial information 1 $ in millions, except Q1 FY21 Q4 FY20 Q1 FY20 per share amounts Revenue $15,646 $15,258 $14,618 Cost of revenue 12,322 78.8% 12,579 82.4% 11,746 80.4% Total OpEx 1,847 11.8% 1,625 10.7% 1,690 11.5% Operating profit $1,477 9.4% $1,054 6.9% $1,182 8.1% Interest and oth
Slide 13: Q1 FY21 bridge
Q1 FY21 GAAP to non-GAAP bridge $ in millions, except Non-operating Amortization of Restructuring and Acquisition-related tax rate and per share GAAP Tax adjustments retirement related Non-GAAP intangible assets other charges charges amounts (credits) / charges Revenue $15,646 $15,646 Cost of revenu
Slide 14: Select cash and debt balances
Select cash and debt balances Net cash (debt) 1 $ Billions $8.0 $6.0 $4.0 $ Billions 1Q20 2Q20 3Q20 4Q20 1Q21 $2.0 $0.0 Gross cash 2 4.5 4.1 4.9 5.1 4.2 ($2.0) Gross debt 4.9 5.5 6.3 6.3 6.2 ($4.0) Net cash (debt) 1,3 (0.4) (1.4) (1.4) (1.1) (2.1) ($6.0) ($8.0) 1Q20 2Q20 3Q20 4Q20 1Q21 2 Gross cash
Slide 15: Cash flow
Cash flow $ Millions $5,000 $4,316 $4,000 $3,891 $3,000 $2,000 $1,285 $1,121 $1,022 $1,022 $1,000 $908 $908 $0 FY20 YTD FY21 Q120 Q121 1 Net cash provided by operations Free cash flow 1. Free cash flow = Net cash provided by operations adjusted for net investment in leases and net investment in prop
Slide 16: Shareholder return
Shareholder return $ Millions $4.1 billion $4,000 $3,000 3,107 $2,000 $1.6 billion $1.6 billion $1,000 $0.9 billion 1,378 1,378 691 997 250 256 250 $0 FY20 YTD FY21 Q120 Q121 Shares repurchased 166.5 million 60.2 million 33.8 million 60.2 million Dividend per share $0.7048 $0.1938 $0.1762 $0.1938 Di
Slide 17: Outlook
Outlook Q2 FY21 net EPS guidance GAAP diluted net EPS $0.82 – $0.88 Non-GAAP diluted net EPS1 $0.84– $0.90 FY21 net EPS guidance GAAP diluted net EPS $2.98– $3.08 Non-GAAP diluted net EPS1 $3.15 – $3.25 FY21 Free Cash Flow Guidance Free Cash Flow2 At least $4.0 Billion 1. Second quarter fiscal 2021
Slide 18: Supplemental slides
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Slide 19: Inventory and accounts receivable
Inventory and accounts receivable Inventory Accounts receivable In Billions In Billions $7.0 $6.7 16.0% $7.0 16.0% $6.4 $5.9 $6.0 14.0% $6.0 $6.0 $5.7 $5.7 $6.0 14.0% $5.4 $5.4 $5.4 $5.3 $5.1 $5.3 $5.3 $4.9 12.0% % of revenue1 $4.9 12.0% % of revenue1 $5.0 $5.0 11.6% 11.1% 10.0% 10.4% 10.5% 10.0% $4
Slide 20: PP&E and accounts payable
PP&E and accounts payable PP&E Accounts payable In Billions In Billions $3.0 $2.8 6.0% $16.0 $2.8 $2.7 $14.6 $14.8 $14.7 $15.0 $2.7 $2.6 $14.2 $14.3 $2.5 $13.8 $2.4 $2.5 $14.0 5.0% $12.8 $2.4 4.8% 4.7% 4.8% 4.7% $12.0 4.6% % of revenue1 4.2% 4.4% 4.0% 4.1% $1.8 $10.0 3.0% $8.0 $1.2 2.0% $6.0 $0.6 $4
Slide 21: Working capital metrics
Working capital metrics 140 120 100 80 60 40 20 0 -20 -40 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Days receivables 35 33 35 30 37 33 32 30 Days inventory 43 44 41 38 57 45 43 49 Days payable 110 113 107 98 128 108 105 109 Cash conversion cycle1 1 -32 -36 -31 -30 -34 -30 -30 -30 1. Cash conve
Slide 22: FY20 bridge
FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Restructuring Debt Defined benefit Amortization of Acquisition- retirement tax rate and per share GAAP and other extinguishment plan settlement Tax adjustments Non-GAAP intangible assets related charges related (credits) amounts charge
Slide 23: Q4 FY20 bridge
Q4 FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Restructuring Defined benefit Amortization of Acquisition- retirement tax rate and per share GAAP and other plan settlement Tax adjustments Non-GAAP intangible assets related charges related (credits) amounts charges charges / charg
Slide 24: Q3 FY20 bridge
Q3 FY20 GAAP to non-GAAP bridge Non-operating Amortization $ in millions, except Restructuring Debt retirement of Acquisition- Tax tax rate and per GAAP and other extinguishment related Non-GAAP intangible related charges adjustments share amounts charges costs (credits) / assets charges Revenue $14
Slide 25: Q2 FY20 bridge
Q2 FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $12,469 $12,469 Cost of revenu
Slide 26: Q1 FY20 bridge
Q1 FY20 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $14,618 $14,618 Cost of revenu
Slide 27: FY19 bridge
FY19 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization retirement Restructuring and Acquisition- tax rate and per GAAP of other charges related charges Tax adjustments related (credits) Non-GAAP share amounts intangible assets / charges Revenue $58,756 $58,756 Cost of revenue
Slide 28: Q4 FY19 bridge
Q4 FY19 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $15,407 $15,407 Cost of revenu
Slide 29: Q3 FY19 bridge
Q3 FY19 GAAP to non-GAAP bridge Non-operating Amortization $ in millions, except Restructuring Acquisition- Defined benefit retirement of Tax tax rate and per GAAP and other related credits plan settlement related Non-GAAP intangible adjustments share amounts charges (charges) charges (credits) / as
Slide 30: Q2 FY19 bridge
Q2 FY19 GAAP to non-GAAP bridge $ in millions, except Non-operating Amortization Restructuring and Acquisition- retirement related tax rate and per GAAP of other charges related charges Tax adjustments (credits) / Non-GAAP share amounts intangible assets charges Revenue $14,036 $14,036 Cost of reven
Slide 31: Q1 FY19 bridge
Q1 FY19 GAAP to non-GAAP bridge Non-operating $ in millions, except Amortization Restructuring and Acquisition-related Tax retirement related tax rate and per GAAP of Non-GAAP other charges charges adjustments (credits) / share amounts intangible assets charges Revenue $14,710 $14,710 Cost of revenu
Slide 32: Thank you
Thank you